Is Consumerism at Odds with Prevention The indirect effects of consumerdirected health plans on prev

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Is Consumerism at Odds with Prevention?The
indirect effects of consumer-directed health
plans on preventive service utilization

• Stephen T Parente, University of Minnesota
• Giridhar Mallya, University of Pennsylvania
• Craig Pollack, University of Pennsylvania
• Daniel Polsky, University of Pennsylvania
• Roger Feldman, University of Minnesota
• William McGuire
• Presentation at the American Society of Health
  Economics, June 24, 2008
• Sponsored by the Robert Wood Johnson Foundations
  Health Care Financing Organization Initiative
  (HCFO) and the U.S. Department of Health and
  Human Services

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Presentation Overview

• Background
• Research Question
• Research Setting
• Empirical Approach
• Caveats
• Results
• Discussion

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Consumer Driven Health Plans

• Consumer owns the Health Savings/Reimbursement
  Account (HSA/HRA)
• Unused roll-over at year end
• HSA must be purchased with complementary high
  deductible health plan (HDHP)
• Can be purchased by consumers in the
  state-regulated individual or small group
  markets.
• Employers provide HSAs/HRAs as part of their
  benefits package.
• Money deposited in HSAs is tax-advantaged.
• For HSA, unused at 59 years of age can be used
  for medical care and retirement.
• For HSA, early withdrawal penalty for any use
  other than healthcare.

HSA/HRA
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Previous Literature

• Rowe, et al (2008), compare preventive care rates
  in CDHP and a PPO settings managed by Aetna No
  difference in prevention.
• Mallya, et al (2007) compare preventive care
  rates in CDHP and traditional plan in one
  employer In CDHPs -fewer preventive care visits
  more pap smears.
• Busch, et al (2006), Alcoa mandated
  high-deductible coverage for a subset of
  employees. Found no significant difference in
  preventive care use.
• Wharam, et al (2008), total replacement study.
  Little change in cancer screening. Closest to
  this study.

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Research Questions

• Primary What is the impact of consumer driven
  health plans on preventive care?
• Secondary What factors affect the utilization of
  preventive care when offered in a total health
  plan replacement setting with a CDHP?

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Conceptual Model

• Health benefit design affects the demand for
  medical care, including preventive services.
• Increased patient copayment acts as price
  increase in medical care demand.
• Can be empirically tested by the evaluation of a
  reduced form expression of the demand for medical
  care in a CDHP total replacement with higher
  cost sharing.

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Data to Address Research Questions

• Four Large employers with over 50,000 covered
  lives.
• Medical Pharmacy claims and enrollment data or
  two years pre and post implementation of CDHP
  design.
• The employers had a full replacement of their
  PPO/POS plan designs with a CDHP design.
• Two of four employers adopted CDHP design later
  in 2006, the rest in 2005.
• Continuously enrolled sample for two years.

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Econometric Approach

• Use a two part model to complete a
  Difference-in-difference estimate of the effect
  of expenditure on of a CDHP total replacement.
• Evaluate probability of getting any preventive
  care use for a set of specific measures
• Any preventive care visit
• Colonoscopy screening age 40 to 64
• Mammography screening, women aged 40 to 64
• Cervical cancer screening, women aged 24 to 64
• Use firm-specific interaction with the second
  year of adoption to identify the impact of CDHP
  total replacement.

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Caveats

• Unlike previous work, we can not control for the
  impact on income.
• There is unexplained market level variation.
  Have considered using state-effects as a
  correction.
• Early results.

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Attributes of Individuals w/Coverage at Baseline
from 4 Firms
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Descriptive Statistics of Prevention Services
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Descriptive Statistics of Expenditures
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Summary of CDHP Impact by Firm for
Expenditures and Prevention
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CDHP Replacement EffectTotal Expenditures
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CDHP Replacement EffectTotal Medical
Expenditures
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CDHP Replacement EffectConsumer OOP Medical
Expenditures
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CDHP Replacement EffectTotal Pharmacy
Expenditures
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CDHP Replacement EffectConsumer OOP Pharmacy
Expenditures
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CDHP Replacement EffectProbability of Any
Preventive Visits
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CDHP Replacement EffectProbability of
Colonoscopy Screening
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CDHP Replacement EffectProbability of
Mammography Screening
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CDHP Replacement EffectProbability of Cervical
Cancer Screening
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Summary of CDHP Impact by Firm for
Expenditures and Prevention
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Summary of Empirical Findings

• Total replacement with CDHPs achieves a level of
  cost savings not seen in previous empirical
  studies where consumers had other plan choices.
• Significant increases in consumer expenditures
  found in some firms.
• General decrease or neutral affect on prevention.
  Few of the changes in preventive care measures
  were statistically significant.
• At best consumerism affects prevention in a
  neutral fashion. At worse, consumers use
  prevention less.
• Irony is that prevention was covered at 100
  reimbursement with no cost-sharing in all of the
  firms.

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Next Steps

• Get more precise firms specific affects beyond a
  linear probability model.
• Address selection more completely.
• Bootstrap correct standard errors for interaction
  affects on expenditure and utilization. Prior
  work has shown the bootstrapped significance is
  not as significant as the non bootstrapped
  method.
• Try to find firms with second and third year post
  replacement affects

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Thank You!For more information on our
research, please visitwww.ehealthplan.orgStep
hen T. Parente, Ph.D., M.P.H., M.S.Associate
Professor, Department of FinanceDirector,
Medical Industry Leadership InstituteCarlson
School of ManagementUniversity of Minnesota321
19th Ave. South, Room 3-122Minneapolis, MN
55455612-624-1391 (v)sparente_at_csom.umn.eduhttp
//www.tc.um.edu/paren010